Snopes economic analysis of cash-for-clunkers

In 2009, the federal government's Car Allowance Rebate System (CARS), commonly known as "Cash for Clunkers," provided consumers with $3,500 or $4,500 discounts for trading in older model automobiles and purchasing new, more fuel-efficient vehicles. The analysis presented above maintains that the CARS program essentially spent $3 billion in federal (i.e., taxpayer) funds in order to save $350 million in (foreign) oil purchases, an inefficient economic trade-off. However, the analysis is flawed in key aspects.